It is more beneficial to invest in equity mutual funds instead of pension schemes.

Mutual funds offer better flexibility when compared to other pension options. Apart from NPS, many insurance companies also offer pension schemes. It is more beneficial to invest in mutual funds instead of these schemes. In NPS, your money is effectively locked in until you are 60. When you withdraw, you have to mandatorily convert 40 per cent of your accumulation into an annuity. Pension schemes of insurance companies invest mainly in debt instruments and offer very low returns. Diversified equity funds or balanced funds, in contrast allow you to invest in SIPs and switch out if the plan doesn't perform.

If you are a conservative investor, you can consider SIPs in good balanced funds such as HDFC Balanced, Canara Robeco Balanced and Tata Balanced Fund. If you can take on higher risks pure equity schemes would do. Franklin Templeton High Growth Companies is a very good fund. You can consider large and mid-cap funds such as Franklin Prima Plus, Mirae Asset Opportunities, Birla Frontline Equity among your choices.